(AP) -- Kansas Gov. Kathleen Sebelius, President Barack Obama's choice to head the Health and Human Services Department, said Tuesday she backs his call for giving Americans the option of government-run health insurance as an alternative to private coverage.

The proposal for a public plan that would compete with private insurers has emerged as the most divisive issue as Obama seeks to overhaul the health system to reduce costs and shrink the ranks of 48 million uninsured. Republicans fear that the competing plan would drive some private insurers out of business.

"If the question is do I support a public option side-by-side with private insurers," Sebelius said, "yes I do."

She faced questions on the issue as she testified before the Senate Health, Education, Labor and Pensions Committee. Sebelius said she didn't support fully government-run health care.

An exchange with Sen. John McCain, R-Ariz., over the Obama proposal was perhaps the most heated in a low-key 2 1/2-hour hearing. Sebelius pledged that if confirmed, "health reform would be my mission."

"Inaction is not an option. The status quo is unacceptable, and unsustainable," said Sebelius, citing high health care costs that she said were hurting families and crippling the economy.

Sebelius was welcomed by Sen. Edward M. Kennedy, D-Mass., who has been battling brain cancer. His hands shaking slightly, Kennedy said that over the past 10 months, he has experienced the health care system up close. "I've benefited from the best of medicine. But we have too many uninsured Americans," said the committee chairman.

Toward the end of the hearing, Kennedy asked Sebelius to affirm her support for cancer research. She did.

Sebelius was introduced by former Sen. Bob Dole of Kansas, the one-time Senate Republican leader and 1996 presidential nominee. Dole echoed Sebelius' call for quick action to overhaul the health system and praised her as a bipartisan leader who could pull it off. He sat next to her at the witness table for most of the hearing.

While Obama has pushed for health care overhaul, lawmakers have questioned how the administration would pay for the plan. Sebelius didn't offer a specific solution, but said the approach must be comprehensive.

Sebelius cited Kennedy's home state of Massachusetts, where a pioneering 2006 law requires nearly everyone to carry insurance or face fines. Policy makers there decided to extend coverage first, and deal with costs later. Now costs are ballooning.

The lesson, Sebelius said, is costs and coverage must be dealt with in concert.

Sebelius also said it was premature to discuss whether the Food and Drug Administration's food safety functions should be split into a separate agency, as some have suggested after recent salmonella outbreaks.

"Step one is restoring FDA as a world-class regulatory agency," Sebelius said.

She sought to reassure senators that she wouldn't allow Obama's plan to spend $1.1 billion on health effectiveness research to result in bureaucrats rationing care based on cost.

"Providers should make medical decisions," Sebelius said.

Sebelius is Obama's second pick to head the department. Former Senate Democratic Leader Tom Daschle withdrew from consideration while apologizing for failing to pay $140,000 in taxes and interest.

Daschle was supposed to lead the health overhaul effort as HHS secretary and head of the White House Office for Health Reform. When he dropped out of consideration the job was split and a separate White House health czar was named.

Sebelius would still play a major role in health legislation efforts. Her background on health care includes blocking an insurance company merger in Kansas while insurance commissioner in 2001. She has faced opposition from conservatives over her support for abortion rights, but senators didn't raise that issue Tuesday.

The health committee won't actually vote on sending Sebelius' nomination to the full Senate. That job falls to the Senate Finance Committee, which will hold Sebelius' confirmation hearing Thursday.

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